ResCare Hits Refresh: Major Tech, Workforce Investments Support New Strategy

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A new era is underway at ResCare, one of the largest providers of in-home personal care in the United States.

With some fresh voices and vision in the C-suite, the Louisville-based company is making a push to expand its clinical services and position itself as a key partner for managed care payors. The effort involves major investments in technology, a move to a new headquarters, and refreshing a corporate culture that had been successful but was long entrenched.

One major step came in September 2016, when Jon Rousseau became president and CEO, succeeding Ralph Gronefeld Jr., who had spent 21 years with ResCare. With a background in private equity and investment banking, Rousseau came to ResCare from Louisville-based Kindred Healthcare (NYSE: KND), where he was president of Kindred at Home’s care management division. Kindred at Home became the largest home health provider in the nation after acquiring Gentiva Health Services in 2014.

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The ResCare strategy bears a resemblance to what Kindred has done over the past several years, creating a multi-faceted company with services across the post-acute care continuum. For ResCare, that means starting with its massive personal care business and layering on more clinical services and care management capabilities.

“I came here because I thought we had an incredible platform serving the most complex and vulnerable populations in the country, and I saw an opportunity to evolve our leadership and strategy to achieve some great things for our clients and patients out in communities we serve,” Rousseau told Home Health Care News.

New directions

ResCare is already a diversified company, serving about 60,000 people daily across 42 states, with annual revenue of around $2 billion, largely through Medicaid. Its divisions include home care for seniors, residential services for children and people with disabilities, neuro-rehabilitation, workforce services, pharmacy, and behavioral health and integrated care.

So, the 44-year-old business has deep experience in delivering personal care in the home for a variety of patient populations, and that expertise is starting to be more sought after and appreciated than ever before by payors and other entities across the health care system, Rousseau believes.

“The literature I’ve been reading lately highlights the benefits of a non-medical model,” he said. “The value proposition is just tremendous. Everybody’s been talking about it for five to 10 years … what you do to lower costs for society and improve outcomes is effectively get to [patients] proactively and manage their care in community settings. Periodic stints in the hospital isn’t going to cut it.”

Preventing falls in the home, ensuring medication adherence, supporting proper nutrition, and facilitating mobility and proper grooming are among the non-medical services that are proving to be highly effective at keeping people well and out of the hospital, he noted. That’s not enough, though. As people age or their conditions worsen, there is a need for medical interventions as well, so ResCare is positioning itself to provide more of those services.

“With seniors, we can take rehab and home care expertise and apply more of a clinical capability set to overlay on that, as a huge opportunity for this company and the clients and patients we’ll serve,” Rousseau said. “For example, hospice is incredibly synergistic with what we do. Most people on hospice require home care. Home health is synergistic with what we do, there’s an obvious overlap.”

In addition, Rousseau envisions creating home-based primary care models led by physicians, physician assistants and nurse practitioners. The idea is that they would act as “air traffic control” to help manage the care for patient populations, and provide a key selling point for ResCare in working with managed care payors.

“We think by doing that, we have a tremendous opportunity to go to payors and say … let us help manage these populations more aggressively with you to the benefit of all,” Rousseau said.

Among the first steps in achieving this vision, ResCare has been hiring leaders with expertise in home health, hospice and other clinical fields. In the last year alone, the company has brought on board 150 people at the mid-level manager position or higher, Rousseau said. Ultimately, he sees capabilities such as hospice being added through both acquisitions and internal efforts.

Having the right technology is also critical, and the company is investing “millions and millions” of dollars on this front, he said. A major goal is to update the electronic resource planning (ERP) software for all its business divisions. On the home care side, ResCare has partnered with an ERP technology vendor that is also working with managed care organizations in several states. ResCare also has telehealth capabilities, which it views as a core component of a “connected home” model of care, with in-person caregiving supplemented by remote monitoring.

Other post-acute and senior care providers also are seeking to gain an edge with managed care by diversifying their services and upgrading their tech—a fact that Rousseau recognizes. He points to both Kindred and Baton Rouge, Louisiana-based Amedisys (Nasdaq: AMED). But these companies have started on the clinical side and are newer to the personal care world, whereas ResCare is coming at it the other way around. And some companies have said that managed care organizations have been slower then they expected in embracing home care and home health providers as partners, but Rousseau remains confident.

“I think the million-dollar question for a lot of people is what’s the best model and when?” he said. “From all of our conversations, I firmly believe that the payors feel strongly that the services that are provided in the community offer tremendous value, and more than anything, I think that it’s a game of sitting down together and figuring out what model and partnership makes the most sense and how do we work together.”

Costs and culture

Of course, Medicaid margins can be tight, so ResCare is trying to cut and control costs as it makes investments in tech and other areas.

With the lease on its corporate headquarters expiring in the fall of 2018, the company decided to move to a new location in Louisville that is smaller but more modern (pictured above). As part of the HQ relocation, ResCare received $550,000 in tax incentives.

“We’re moving to a new shiny building down the street because it costs half as much as this,” Sonny Terrill, ResCare’s chief human resources officer, told HHCN. “This building has served its purpose, but trust me, we look at every dollar we spend to make sure we’re taking the taxpayers’ money and taking care of [our patients], so every dime is spent in the right direction.”

Terrill, hired last fall, is part of the new generation of leadership to join ResCare since Rousseau became CEO. Having previously been with a Medicare Advantage company, Cigna-HealthSpring, Terrill believes that the current strategy for ResCare will bear fruit. He points to the recent deal in which insurance giant Humana (NYSE: HUM) bought a stake in Kindred at Home, saying this shows that bigger payors are “coming our way.” The local focus of ResCare is another key driver, he said.

“When I was with Cigna, one of their mottoes was go global, go deeper—as in, go as deep in your markets as you can,” he said. “We’re already there… in Somerset, Kentucky, [the ResCare business] is built for Somerset, Kentucky … In Seattle, Washington, they figured out what works there. What we’ve done is give them the flexibility to run their businesses and the tools to do that.”

Rexanne Domico, president of the home care and neurorehabilitation business, also joined ResCare last fall. Despite all the fresh faces, about half the executive team is long-tenured, she emphasized.

“I do think that there is a really nice blend of the new [and existing] culture at ResCare … which in general has done things really well for a really long time,” she said. The blend of old and new is reflected in the acronym LEGACY, used to express the company’s norms and values.

So far, ResCare’s new leaders have found a strong legacy to build on, while the company’s existing workforce has been receptive to change, according to Terrill and Rousseau.

“There was a lot to build on in terms of the services we provide and the value of these services and the mission of company,” Rousseau said. “I think it’s always good for any organization, after a period of some time, to have a little bit of a change … and what I’ve seen is an absolute embracing of any new ideas that the new leadership team has had.”

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